As advances continue to be made in screening technologies, the use of labels in traditional drug discovery screening assays has
been criticized as producing undesirable and unanticipated interactions that can compromise screening data and lead to false conclusions. Critics also argue
that labeled technologies typically require the use of genetically modified cell lines that can alter cellular behavior.

Label-free detection,
on the other hand, is proving to be a highly sensitive method of measurement for endogenous targets in live cell assays, and eliminates the need for tags,
dyes or specialized reagents or engineered cells—reducing the resources required for assay development, simplifying assay design, minimizing liabilities
created by the use of labels and enabling the use of native cells for greater biological relevance.

In the last year, ddn has
reported on many business developments in the label-free technology market. In December 2009, we reported that Caliper Life Sciences entered into an
agreement with SRU Biosystems to use its label-free BIND technology to offer new functional assays as part of its discovery alliances and services. The same
month, we also reported that Corning Inc. and PerkinElmer Inc. partnered to combine the companies' expertise in optical label-free and multimodality
detection in an effort to advance the development of next-generation label-free technologies. In April 2010, we reported that ForteBio chose Tecan as its
preferred automation partner for real-time, label-free assays to support bioprocess and drug discovery workflows. In November 2010, we brought you the news
that ACEA Biosciences Inc. and Vivo Biosciences Inc. agreed to work together to develop label-free and real-time cell-based assays for the xCELLigence
System, which is co-developed by Roche and ACEA and marketed by Roche Applied Science. And most recently, last month, we reported that Activiomics and
Belgian biopharma UCB will apply Activiomics' Targeted In-depth Quantification of cell Signaling (TIQUAS) phospho-proteomics platform—a system that is
quantitative, label-free and applicable to cell and tissue samples—in a collaborative effort to elucidate signaling mechanisms of therapeutic antibodies in
relevant cell-based systems.

Label-free technologies enable drug discovery researchers to monitor a wide array of target types that play a
role in the study of diseases such as diabetes, obesity, cancer, inflammation, neuromuscular disorders, pathological pain and psychiatric disorders. The
technology has been shown to be applicable to all major classes of drug targets, including GPCRs, kinases, enzymes, ion channels, and protein-protein and
protein-ligand interactions, enabling broader research applicability.

However, as these technologies are new and still in their infancy, they
are not without challenges and limitations. ddn recently reached out to several companies that are blazing the label-free trail to discover how
these technologies are being used, where they are most beneficial and where this market may be headed.

Sharing their views on label-free
technologies are: Christopher M. Silva, vice president of marketing at ForteBio Inc.; Dr. Achim von Leoprechting, vice president of imaging and detection technologies at PerkinElmer Inc.; and Philippe Mourere, head of sales, marketing and business development
for Caliper Discovery Alliances &
Services (CDAS).

ddn: What applications do label-free technologies make possible that are either impossible with current
technologies, or so impractical as to have made them unapproachable without label-free technology?

Silva:
Measurement of real-time rate constants for the binding of two biomolecules, such as proteins, peptides, oligonucleotides and small molecules, and their
dissociation is obtained via label-free, real-time biosensor techniques; these measurements are not routinely feasible with labeled techniques. All
applications in biotherapeutic discovery and development such as epitope mapping and binning and antibody screening are impossible, or at least highly
cumbersome, with labeled techniques. In small-molecule lead characterization, label-free assays are playing a pivotal role in validating the direct binding
of small molecule and fragments to target protein. Also, labeled assays show end-point results only and do not allow real-time kinetic measurements such on-
rates, off-rates and affinity measurements, which lead to critical information being missed, or weak binding compounds being missed in a screen.

von Leoprechting: I don't believe there are new applications, per se. Novel pharmacologies have been seen using label-free
technology and then confirmed using other orthogonal approaches. These responses, which haven't been seen using other screening methods, can provide crucial
additional information to researchers working with cellular phenomenon such as biased agonism, functional selectivity and dimerization. This allows them to
use labeled technologies in a more targeted and efficient way.

Mourere: Cell signaling, functional assays in native target
expression cell hosts conditions can be very challenging using typical approaches. Conventional receptor overexpression in recombinant cell lines, combined
with second messengers (cAMP, calcium, etc.), are sometimes misleading, especially when assessing partial-agonist drug pharmacology. Those same assay
technologies also show limitations of sensitivity and assay robustness when used to measure GPCR activation and inhibition in native expression conditions in
primary cells and stem cells. The label-free approach is well suited for protein-protein interactions studies. Inherent challenges of ligand/molecule
radiolabeling, fluorescence labeling or antibody coupling are totally overcome. Those protein modifications necessary to measure a specific protein-protein
interaction signal can potentially affect the conditions in which both protein partners interact in physiological conditions.

ddn: What are the benefits of label-free assays in comparison to traditional methods using radioactive or fluorescent tags?

Silva: Label-free assays eliminate issues such as photobleaching that are common in most fluorescent tags. They also eliminate
the need for optical filters and reduce the restriction on distance dependence of the binding interaction that plague some fluorescent resonance energy
transfer (FRET) assays. Label-free assays do not have the physical exposure hazard that is inherent in radiolabeling. Labeling can in some cases either block
the active site of target proteins, or lead to significant changes in conformation of the protein that affects its function. Label-free assays overcome these
deficiencies, reduce assay time and expedite workflow. The ability to characterize binding pairs without having to develop reagents or labels is a huge
benefit. In some cases, you are unable to tag these samples as they exist in a crude milieu, or because the compounds are simply not characterized to do any
labeling. In other cases, you can't label a whole antibody library of 2,000 or so compounds if you are trying to find the optimal therapeutic
candidate.

von Leoprechting: Global pathway independent cellular response; the sensitivity required to enable research with
endogenous and non-recombinant cells as well as recombinant cells; an added level of sensitivity to monitor weak biological interactions, allowing you to see
effects that can be difficult to detect; a non-invasive technique that is more physiologically relevant and also opens up the possibility of reusing precious
cells for more data; no disposal issues, such as radioactive materials and other labeled waste.

Mourere: In the cellular
context, drug cell response measured is holistic and gives a more complete representation of the biological effect of a drug. It is not limited to the
quantification of a single event (second messenger level, for example) and takes the complexity of the whole cell into account. The response measured is a
better representation of the signaling pathways involved in the drug response. This provides a clear opportunity to identify new signaling pathways involved
in a drug response with the potential of uncovering off-target effects and identifying unsuspected targets. A major advantage is that label-free is a more
natural system. Labels as well as dyes can affect ligand-binding affinities. Also, dye loading times and conditions have to be controlled. Some dyes
are proprietary, and there would be no way to predict or explain dye-ligand effects. GPCR response coupled to Gi is easier to do on label-free rather than
working with inhibition of a cAMP increase or GTPgammaS binding with [35S] radioactivity. So really, the utility is that label-free avoids some problems that
occur in traditional GPCR measurement systems. CDAS has also been able to use label-free in fragment-screening assays of small molecules versus a protein
target. We have been able to look at interactions of small proteins and screen for inhibitors. Developing and validating labels for these last two processes
would add significant cost.
Another major advantage of label-free is the ability to see the time course of the response for multiple wells at once.
The pattern of the response can also be interpreted to understand a blended type of response, for example a mixed Gi/Gq response for a GPCR.ddn: Which label-free technologies are most popular right now? Which are being underutilized? Are any being overly relied upon
compared to other types of label-free technology?

Silva: The most common technologies in use are Surface Plasmon
Resonance (SPR) and BioLayer Interferometry (BLI). While SPR has been actively utilized for label-free assays for about two decades now, BLI has gained
strong acceptance in just a few years. Being the fastest growing label-free technology, BLI is certainly the one most underutilized right now. On the other
hand, SPR is the more traditional technique that may be on the wane.

von Leoprechting: Most popular: Surface Plasmon
Resonance (SPR) for binding kinetics studies; optical sensor label-free in high-throughput screening. Underutilized: Optical sensor label-free as a front-end
screening tool based on binding strength prior to SPR; optical sensor and impedance in academic research, particularly GPCR's, ion channels and Receptor
Tyrosine Kinases (RTKs); stem and primary cell work, as well as to exploit the time and cost benefits of reusing cells for a secondary orthogonal assay.

Mourere: There are really two major families of label-free. One uses traditional analytical chemistry techniques such as mass
spectroscopy and NMR. The other covers cellular impedance (Cell-Key) and optical techniques. The field is still young enough that the technologies are still
evolving, so it is difficult to assess popularity.

ddn: In what applications have label-free assays been most successful to
date, and why?

Silva: Label-free assays have been successful in many biochemical screening applications, which
involve protein-protein, protein-DNA, protein-peptide and protein-small-molecule interactions analysis. They are most commonly employed in hit-to-lead
validation in drug discovery to parse hits obtained in primary screening methods that employ labeled assays. Label-free assays have recently been applied
with great success to biotherapeutic discovery and development for epitope binning, crude antibody screening and affinity ranking and bioprocessing to
rapidly monitor protein expression in crude cell culture supernatants. Methods have been developed, and companies such as ForteBio continue to release off-
the-shelf biosensor chemistries to support these applications.

GPCR's and other cell-based assays, due to pathway independent response.
Binding studies have also been successful due to high sensitivity, including fragment screening.
von Leoprechting: Structure
Activity Relationship (SAR) studies due to their sensitivity to small changes in potency from subtle changes in molecular structure; compound profiling, due
to label-free's ability to show interesting pharmacologies in compounds previously dismissed by calcium activation assays, for example.
Mourere: CDAS mostly uses the SRU BIND label-free technology for cell-based GPCR, ion channels and assays in both recombinant and
native receptor cell expression conditions. The same approach is used for protein-protein and protein-ligand interactions assays. Main applications of
interest at CDAS are custom assay development for primary and secondary screening, lead optimization, drug SAR and pharmacology response characterization in
more relevant physiological assay conditions.
Our most popular approach is to develop GPCR assays using cloned receptors in CHO cells. The large
signal-to-noise responses and good Z prime values give us high confidence in the assays. We have access to a large number of cell lines, either actively
growing or division arrested, with which to work. We are pursuing development of ion channels and receptors mediated by tyrosine kinase. We have had success
with a fragment-based screening project and with protein-protein interaction. These cell-free assays are more difficult to develop due to the small signal
that results and require clear hands-on experience.

ddn: What technologies, if any, are label-free technologies going to make
obsolete?

Silva: I would say label-free technologies are replacing certain ELISA assay segments such as those in
ligand binding and cell line development. An ELISA assay that takes four hours or longer can be completed in less than 30 minutes utilizing BLI, with real-
time measurements providing more information about the binding pair. Since the analytical tool set used in drug discovery is diverse, I am not sure if
label-free assays are quite yet replacing any technologies completely. However, there is a promise to replace certain assay segments within major
technologies.
von Leoprechting: None, in our opinion. We see label-free techniques as complementary to other labeled
technologies.
Mourere: Label-free technologies are complementary to conventional technologies, and although they have very
promising future applications, we foresee the coexistence of label-free and conventional technologies with increased market segmentation. End users now have
a larger arsenal of approaches at their disposal to meet their specific needs. For example, if we obtain a weak response on the label-free system, we will
develop an assay using a calcium dye or simply use a calcium flux assay from our off-the-shelf list, if available, for the target of interest. Also, the
specialized techniques are useful to distinguish the type of response, particularly when the response is atypical.

ddn: How
do techniques such as resonant acoustic profiling, (RAP), optical biosensors and surface plasmon resonance (SPR) compare? Describe those you are most
familiar with along with their strengths and weaknesses.

Silva: Label-free biosensors can be based upon SPR,
interferometry, resonant waveguide grating, micro-electromechanical (MEM) or acoustic technology, among others. Among these, SPR is the earliest technology
to have achieved commercial success. However, SPR has continued to be plagued by lack of throughput, complicated microfluidics, expensive chips and
cumbersome use. Also, it is facing increasing competition from non-SPR techniques. Bio-layer interferometry is the most successful such technique and is
likely to continue to grow in stature and acceptance based on its strengths of reliability, robustness in performance, affordability and ease of use. Systems
based on resonant waveguide grating technology have applications in biochemical and cell-based assays. However, they suffer from their inability to
measure kinetic rate constants and the availability of other competing techniques that reliably measure cell-based binding events. Other label-free
technologies have not gained much traction, mainly because they do not offer a compelling advantage over established techniques.

von
Leoprechting: SPR has the advantage of giving binding on/off rates in protein-protein interaction studies, as well as binding strength, but some of
the dominant SPR systems are limited by low throughput. They are very limited in their ability to perform cellular assays and in protein-small-molecule
binding assays. Optical sensor label-free has an immense advantage because of its application to both cellular and biochemical assays, but cannot give
binding on/off rates. Impedance-based systems are limited by their inability to perform biochemical assays, when the market is demanding technologies that
can do both cellular and biochemical assays.

We are most familiar with the SRU BIND system. While we are not
physicists, our understanding is that this is similar to SPR. For the SRU system, the instrument measures a change in the wavelength of the reflected light
as run through a gold-colored grating on the bottom of the plate. As the mass increases at the plate surface, there is an increased response (peak wavelength
value). It is interesting in that CHO cells align themselves like compass needles along the plate grating as they attach to the well bottoms.

ddn: What are some up-and-coming areas of study using label-free technology more routinely?

Silva: Fragment screening, ligand binding assays, protein expression monitoring, epitope binning and screening assays seem to be popular
if one were to attend meetings such as Drug Discovery Chemistry, AAPS, Antibody Engineering and PEGS.

GPCR screening and research,
especially in areas such as biased agonism, dimerism and allosterism.

von Leoprechting: RTK and toll-like receptors;
stem and primary cells; and hit-to-lead studies, particularly for SAR studies within lead optimization.

ddn: Antibody discovery seems to
have been one of the earliest areas to make use of the advantages of label-free technology. How much does it dominate (or not) the field right now?
Silva: I'd say antibody discovery is one of the strongest applications and continues to grow as it supports the
expansion of the biotherapeuetic drugs, which is growing in the teens.
von Leoprechting: It will continue to be an important
area, however, other application areas are emerging due to developments of other label-free technologies, such as optical label-free detection.
Mourere: It represents a small proportion of routine applications.

ddn: Has label-free technology
enhanced/improved the growing arena of systems biology? If so, how? Also, in what ways might it pose complications or challenges in systems biology work?

Silva: Systems biology relies on the ability to collect large quantities of high-quality data to reliably develop
an integrated model of interactions in biological systems. Monitoring protein-protein interactions is a big part of the analysis of the dynamics and
interactions within a cell. With the availability in recent years of high-throughput label-free methods such as the Octet, which is capable of simultaneously
detecting different molecular species such as genes and proteins, systems biology is starting to see a positive impact. Biomarker research has benefited
greatly as simultaneous detection of multiple markers in small volumes of samples using simple assay steps without the need for complex labels reduces the
complexity in identifying and revising disease-specific molecular fingerprints. The challenge, however, remains in efficiently processing the large amounts
of data generated with such high-throughput to create truly predictive molecular models that advance our understanding of cellular function.

von Leoprechting: Label-free is able to identify more complex cellular interactions, such as cross regulation of signaling pathways and
dimerization. The challenge is then to use orthogonal assays to further elucidate the exact nature of the interactions.
Mourere: In a cellular context, a drug response signal can be complicated to analyze and follow up with relevant follow up confirmation
experiments. Using the label free technology in a CRO context with many off-the-shelf, fully optimized functional and binding assays greatly facilitates
follow-up confirmation studies and maximizes the outcome of the label free study. More specifically, label-free can help with systems biology in that we can
use one technique to answer many questions. For example, we can obtain a GPCR ligand library and screen it on a cell line, and determine which GPCRs are
functional. Thus, it is complementary to DNA microarrays and phosphorylated protein arrays in determining the state of the cell. As we understand cells, we
see that, the presence of mRNA does not indicate that a functional protein is produced, and the presence of a protein does not indicate if it is transported
to the proper location, with the proper number and with the appropriate cofactors and in the absence of inhibitors. Caliper has a long history of profiling
cells to look at receptor expression. So we see label-free as the kind of broad technique necessary to ask and answer many questions quickly. It should
complement the multiplex technologies such as bead-based measurement of interleukins, in cell-kinase activity and similar cell products.

ddn: What are the major challenges to the use, application or adoption of label-free technology?
Silva:
Scientists' understanding of how label-free technologies are enabling, and high capital and running costs as well as weekly maintenance costs of
SPR systems, have relegated label-free platforms to the well-funded labs and academic core labs. SPR platforms are also complex to run, making them not
suitable for the multi-user laboratory.
von Leoprechting: Capital cost; perception of high-assay cost—our goal is to show
that the overall cost of a label-free assay is comparable to the cost of standard research methods; and understanding of the benefits. With the advent of
more affordable platforms, researchers who would not have looked beyond the capital cost of label-free hardware will now be open to understanding the
benefits because a benchtop system now makes label-free more accessible to them, with no compromise in the label-free performance of more expensive systems.
Mourere: The implementation of the label -free technology requires in-depth training and scientific dedication to maximize
the potential and the outcome. The cost of dedicated consumables greatly varies between vendors, but can represent a barrier to adoption or to use in drug
screening.

ddn: Some researchers have been critical of label-free technologies, saying they have not lived up to
expectations. Where is this true, and why?

Silva: I believe this is true with cell-based label-free assays, where
the cell is pretty much a black box. For this reason, we have not seen growth in any of the cell based label-free technologies such as resonant wave guide-
and impedance-based methods. With SPR, due to the above-mentioned challenges of throughput, costs and complexity, this technology's growth has also tapered
off. However, BLI offers promising growth.

von Leoprechting: It's important to understand what those expectations were and
difficult to respond without that information. The most common argument against label-free in my experience has been that label-free is a "black-box"
technology. Some of the biggest fans of label-free have made the point that they agree that in some ways it's a black box, but nevertheless, black-box
technologies have been invaluable to scientific research for centuries and are invaluable to them for the reasons given above.
Mourere: Vendors of label-free technologies play an important role in the wider adoption. Their ability to continue developing innovative,
enabling applications overcoming challenges of existing technologies is key. This will probably require the development of more high-content, label-free
instrumentation/applications. As the technique evolves, technical innovations by the researcher and the instrument vendor and decreased instrument and
consumable costs will make label-free a real workhorse for the biological community.